tl;dr
The U.S. Department of Justice has disbanded its National Cryptocurrency Enforcement Team and will no longer pursue criminal cases against crypto exchanges, mixing services, or cold wallet holders for unwitting violations of regulations. The DOJ will only pursue criminal charges in cases involving e...
The U.S. Department of Justice has disbanded its National Cryptocurrency Enforcement Team and shifted its policy on pursuing criminal cases in key crypto-related areas. The DOJ will no longer pursue criminal charges against crypto exchanges, mixing services, or cold wallet holders for unwitting violations of regulations. Prosecutors will only pursue criminal charges in cases involving embezzlement, scams, rug pulls, and hacks. Additionally, the DOJ will not take action against platforms used by criminal enterprises for illegal activities, aligning with President Trump's executive order to protect individuals' access to public blockchains.
In a major shift of agency policy, the DOJ announced in the memo that in cases where a criminal enterprise or state enemy uses a crypto service to launder funds, prosecutors will only pursue the enemy group itself, and “will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.”
For years, crypto mixing services like Tornado Cash—which allow users to keep their crypto transactions private—have attracted government scrutiny, given they are popular not only among privacy advocates, but also with criminal groups looking to launder digital assets. In 2023, the DOJ arrested and filed criminal money laundering charges against the site's creator, Roman Storm, who has vigorously protested the case on the grounds that Tornado Cash is a permissionless service that does not intentionally aid criminal actors.
Last month, the U.S. Treasury Department lifted sanctions against Tornado Cash in compliance with a court order, and in last night’s DOJ memo, the Deputy Attorney General specifically stated that cases inconsistent with the agency’s new crypto policies should be dismissed.
The DOJ says its hard pivot on crypto aligns with President Donald Trump’s executive order on the subject, which in late January ordered key federal agencies to protect and promote the ability of individual citizens and private entities to access public blockchains without fear of “persecution.”
“The prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed,” Deputy Attorney General Blanche wrote to DOJ staff last night, in a reference to the policies of former president Joe Biden and his administration. Therefore, America’s top prosecutor will no longer pursue what it perceives to be “criminal matters premised on regulatory violations resulting from diffuse decisions made at lower levels of digital asset companies.”